Whether your partnership is new, forming, or looking to transform so as to improve and grow your business, one thing is certain— for sustained success, you can’t only focus on the business aspects of the past success of the partnership and the predicted success of the business (based on strong market demand or niche). If you only do that, you may be assuming a future based on a very weak foundation. And that weak foundation is – not knowing and addressing the issue of partner compatibility and alignment. Enthusiasm for a business idea or for the success of the business can mask partner instability.
Partner stability is critical to your business success. Remember when you formed the partnership and created the business, the enthusiasm and excitement were palpable. You likely planned for what business you would be in, how you would run the business, who would have what role and you launched. You also likely ignored two additional components for success:
- Are the partners really compatible and aligned?
- Do you have an agreed upon exit strategy.
That’s right, you heard us correctly, having an exit plan is important when you form the business. We acknowledge that it is also something no one wants to talk about in the euphoria of business formation.
The strength of any relationship is not defined by the good times; it’s defined by the stressful times. And stress occurs when partners have different expectations for the business. One partner may want to leave the business. One partner may not feel the other partner is carrying their load in the business. The reasons are many, but the effect is similar: partner disagreement, anger, acting out, and creating a crisis in the business. And a potential result is dissolving a very successful business. Solomon offered to “cut the baby in half”. While that is an awful solution for the baby, it’s a wise decision for the business. But if there is no agreed upon exit plan, then the polemics created by partner distrust prevail.
In Thursday’s Quick Tips, we will provide recommendations on how to determine the strength of you partnership, and ideas for framing an exit plan
Copyright 2010 Kubica and LaForest
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